Venezuela has given the world's biggest oil company, ExxonMobil, until the end of this year to enter a joint venture with the state.

Failure to do so will almost certainly result in Exxon losing its oil field concessions in the country.

Venezuela's socialist government has now signed new agreements with almost all foreign petroleum companies.

After months of pressure from left- wing leader Hugo Chavez most foreign oil firms working there have caved in.

They have agreed to hand over a controlling stake of their oil interests to the Venezuelan state.

This means that Venezuela, which has the world's largest petroleum reserves, now calls the shots in what the foreign guests can and cannot do.

In addition, the companies which have signed the new contracts - such as Chevron, BP, Shell and Total - will in future be presented with much higher tax bills by the government.

Foreign unease

But Venezuela says it is only fair that the foreigners are made to pay up as they have got away lightly in the past.

Much of the oil revenue in Venezuela goes into social projects in shanty towns and poor rural areas.

But the US oil giant, ExxonMobil, is digging in its heels and is so far refusing to agree to the terms of the new deal.

Exxon risks losing Venezuelan operations if it fails to comply.

There is growing unease among foreign energy companies based Latin America that they may be forced to become junior partners by a string of left wing governments.

In the case of Bolivia and the apparent shift to the left there following elections on Sunday, it is possible that the new government will decide to follow Venezuela's example and renegotiate oil and gas contracts with foreign investors.

Venezuela has announced that it is increasing the royalties paid by foreign oil companies from 1% of the sale price to 16.6%. President Hugo Chavez said it marked the second and true phase of the nationalisation of the country's oil.

He made the announcement in his weekly television address, with the oil port of Puerto de la Cruz as his backdrop.

During his address on Sunday, Mr Chavez said: "We are no longer going to give our oil away for reasons that no longer exist, if they ever did."

'Legitimate move'

Venezuelan Energy Minister Rafael Ramirez told the BBC that no warning had been given to the oil companies concerned - which include Exxon Mobil, Total Fina Elf and Conoco Phillips.

But he insisted that the increase was entirely legal.

The 1% level of royalties was granted by the previous Venezuelan government in the mid-1990s as a special measure to attract foreign investment.

But the minister insists that now international prices have risen and productivity in these oil fields is three times higher than expected, the Venezuelan government has every right to return royalties to their earlier levels.

He says he does not expect future dealings with what he called serious oil companies to be affected.

Watching the bold actions of Venezuela, and its powerful president Hugo Chavez, is making me rethink my position in Africa. Clearly "third world countries" have greater authority over US companies and their former colonizers than many believed possible. With strong leadership, a country's economic and political power can be turned around at a astonishing pace. Our focus has to be on replacing the stagnant leadership in Africa, for true change to take place. This is the 1st order of business these dinosaurs and European puppets have to go.

It's nice to see that Hugo Chavez is making his socialist agenda felt instead of using his power and resources to gain further wealth solely for the purpose of raping his citizens and country for all he can take. It's true that other countries can do the same if they would just take a stand against western influences. It starts with resources and the leadership that controls it. Unfortunately, there are too many power/ money hungry leaders and puppet leaders that control a lot of the resources and make deals that are detrimental to the country and the citizens in it. It's good to see that South America is taking a stand even at recent months trade talks in which "president" bush was greeted by a country of fed-up citizens and some uninterested leaders. It's a shame that the U.S. citizens don't have the backbone to do the same.